Table of Contents
Ultra Short Term Bond Funds
Ultra short term funds, earlier referred as Liquid Plus Funds, are funds that invest in debt instruments having residual maturities of more than 91 days and typically less than 1 year(in some cases they may go upto 1.5 years). Ultra Short Term Funds are short term investments that are highly suitable for investors who are willing to marginally increase the risk of investment to earn good returns. Essentially, Ultra short Funds invest in money market securities and other debt instruments of short maturities, however, the average Portfolio maturity of these funds is generally little higher than that of Liquid Funds.
Also known as Cash or Treasury Management Funds, Ultra Short Term Funds generally offer good returns that other types of Debt fund (like Liquid Mutual Funds).
Ultra Short Term Bond Funds Features
Fund Type
Ultra-Short Term Funds are open-ended and the maturity period of funds varies from fund to fund. The maturity is very short(usually a couple of months) but longer than that of liquid funds. The investors can easily buy and sell the units of these funds as per the NAV (Net Asset Value) of the Redemption day.
NAV of Ultra Short Term Funds
For Ultra Short Term Funds, the purchase happens on a (T+0) Basis. This means that the NAV is fixed on the same day as the funds reach the AMC. For e.g. for an investor purchasing the fund within the cut-off time on a Tuesday (and funds being realised), the NAV date applicable would be Tuesday itself.
Exit Load of Ultra Short Term Bond Funds
Some Ultra Short Term Funds may have exit loads on exits made within very short periods of time (ranging from 7 days to 1 month). The period till which exit load applies may vary with funds. However, some ultra short terms funds do not have any exit loads also.
Returns of Ultra Short Term Funds
The returns may be paid to the investors in the form of Dividends (in the case of Dividend Funds) or in terms of appreciation of the fund NAV (in the case of Growth funds).
Redemption Ultra Short Term Funds
In the case of redemption, the process is the same for both liquid funds and Ultra Short Term Funds. For all redemption requests received by the AMC within the cut-off time (3 PM), the proceeds are paid to the customer the next day i.e. on a (T+1) basis. Albeit, if the request gets registered after 3 PM, the investors shall receive the redemption amount day after.
Minimum Amount of Investment
The minimum of Investing in Ultra Short Term Funds is INR 5,000 to 10,000 (on the retail plans).
Talk to our investment specialist
Investment Avenues of Ultra Short Mutual Funds
Ultra Short Term Funds are fixed Income investments that invest in money Market instruments like Treasury Bills but these may be 91-Day, 182-Day or 360-Day Treasury Bills. They can also invest in CDs and CPs having residual maturities longer than 91 days. Moreover, it is sometimes understood that there is no credit risk in such portfolios. However, this is not the case. Any short term investment like Ultra Short Funds can give a negative return as well if there is a Default. But, most companies delay payments on longer-dated Bonds before they start defaulting on short term debt (since this would lead a freeze in short term credit). Also, the investors need to carefully look at the portfolio in these funds to assess the quality of instruments and be ready to take that risk.
Why Invest in Best Ultra Short Term Funds?
Typically, the yield on a debt instrument is higher for instruments with longer maturities. Think of it as a way to reward the extra risk that investors take to be invested in the instruments for a longer period of time. In finance, this is called the liquidity premium Theory. Thus, securities in Ultra Short Mutual Funds usually earn a higher yield as compared to Liquid funds (albeit at a relatively higher risk). As a result, Ultra Short Term Funds may give marginally better returns than Liquid funds over comparable periods of time. So, make a sensible short-term investment in Mutual Funds by investing in Best Ultra Short term Mutual Funds to earn good returns with less Volatility.
Taxation of Ultra Short Term Funds
In the below table, the returns of Ultra Short Bond Funds received in the form of a dividend are tax-free in the hands of investors.
However, a Dividend Distribution Tax (DDT) is deducted at the source by fund houses, which is 25% in case of Debt Funds like Ultra Short Term Funds.
| Liquid Funds | Liquid Funds | Ultra Short Funds | Ultra Short Funds | |
|---|---|---|---|---|
| Class of Investors | Individuals/HUF | Corporate | Individuals/HUF | Corporate |
| Dividend Distribution Tax | 27.038% | 32.445% | 13. 519% | 32.445% |
| Short Term Capital Gains | As per income tax Slab Rates | As per Income Tax Slab Rates | As per Income Tax Slab Rates | As per Income Tax Slab Rates |
(Please note, investors are advised to consult their Tax consultant before taking any decisions)
Best Performing Ultra Short Debt Funds to Invest FY 23 - 24
Below is the list of top funds have net assets over 100 Crore and managing assets for atleast 3 years.
Fund NAV Net Assets (Cr) 1 MO (%) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) Franklin India Ultra Short Bond Fund - Super Institutional Plan Growth ₹34.9131
↑ 0.04 ₹297 0.6 1.3 5.9 13.7 8.8 8.7 Aditya Birla Sun Life Savings Fund Growth ₹470.689
↑ 0.15 ₹14,525 0.7 2 3.6 6.5 5.2 6.4 SBI Magnum Ultra Short Duration Fund Growth ₹5,164.52
↑ 1.10 ₹11,493 0.7 2 3.5 6.3 4.6 5.9 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 7 Aug 22
To provide a combination of regular income and high liquidity by investing primarily in a mix of short term debt and money market instruments. Franklin India Ultra Short Bond Fund - Super Institutional Plan is a Debt - Ultrashort Bond fund was launched on 18 Dec 07. It is a fund with Moderate risk and has given a Below is the key information for Franklin India Ultra Short Bond Fund - Super Institutional Plan Returns up to 1 year are on The primary objective of the schemes is to generate regular income through investments in debt and money market instruments. Income maybe generated through the receipt of coupon payments or the purchase and sale of securities in the underlying portfolio. The schemes will under normal market conditions, invest its net assets in fixed income securities, money market instruments, cash and cash equivalents. Aditya Birla Sun Life Savings Fund is a Debt - Ultrashort Bond fund was launched on 16 Apr 03. It is a fund with Moderately Low risk and has given a Below is the key information for Aditya Birla Sun Life Savings Fund Returns up to 1 year are on (Erstwhile SBI Magnum InstaCash Fund) To provide the investors an opportunity to earn returns through investment in
debt & money market securities, while having the benefit of a very high degree of liquidity. SBI Magnum Ultra Short Duration Fund is a Debt - Ultrashort Bond fund was launched on 21 May 99. It is a fund with Low risk and has given a Below is the key information for SBI Magnum Ultra Short Duration Fund Returns up to 1 year are on 1. Franklin India Ultra Short Bond Fund - Super Institutional Plan
CAGR/Annualized return of 8.9% since its launch. . Franklin India Ultra Short Bond Fund - Super Institutional Plan
Growth Launch Date 18 Dec 07 NAV (07 Aug 22) ₹34.9131 ↑ 0.04 (0.11 %) Net Assets (Cr) ₹297 on 31 Jul 22 Category Debt - Ultrashort Bond AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆ Risk Moderate Expense Ratio 0.52 Sharpe Ratio 2.57 Information Ratio 0 Alpha Ratio 0 Min Investment 10,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 0% Effective Maturity 1 Year 15 Days Modified Duration Growth of 10,000 investment over the years.
Date Value 31 May 18 ₹10,000 31 May 19 ₹10,977 31 May 20 ₹11,436 31 May 21 ₹12,326 31 May 22 ₹14,218
Purchase not allowed Returns for Franklin India Ultra Short Bond Fund - Super Institutional Plan
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 Aug 22 Duration Returns 1 Month 0.6% 3 Month 1.3% 6 Month 5.9% 1 Year 13.7% 3 Year 8.8% 5 Year 8.7% 10 Year 15 Year Since launch 8.9% Historical performance (Yearly) on absolute basis
Year Returns 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Fund Manager information for Franklin India Ultra Short Bond Fund - Super Institutional Plan
Name Since Tenure Data below for Franklin India Ultra Short Bond Fund - Super Institutional Plan as on 31 Jul 22
Asset Allocation
Asset Class Value Debt Sector Allocation
Sector Value Credit Quality
Rating Value Top Securities Holdings / Portfolio
Name Holding Value Quantity 2. Aditya Birla Sun Life Savings Fund
CAGR/Annualized return of 7.4% since its launch. Ranked 6 in Ultrashort Bond category. Return for 2022 was 4.8% , 2021 was 3.9% and 2020 was 7% . Aditya Birla Sun Life Savings Fund
Growth Launch Date 16 Apr 03 NAV (06 Jun 23) ₹470.689 ↑ 0.15 (0.03 %) Net Assets (Cr) ₹14,525 on 30 Apr 23 Category Debt - Ultrashort Bond AMC Birla Sun Life Asset Management Co Ltd Rating ☆☆☆☆☆ Risk Moderately Low Expense Ratio 0.49 Sharpe Ratio -0.55 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 1,000 Exit Load NIL Yield to Maturity 7.56% Effective Maturity 5 Months 16 Days Modified Duration 5 Months 8 Days Growth of 10,000 investment over the years.
Date Value 31 May 18 ₹10,000 31 May 19 ₹10,874 31 May 20 ₹11,722 31 May 21 ₹12,369 31 May 22 ₹12,833 31 May 23 ₹13,652 Returns for Aditya Birla Sun Life Savings Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 Aug 22 Duration Returns 1 Month 0.7% 3 Month 2% 6 Month 3.6% 1 Year 6.5% 3 Year 5.2% 5 Year 6.4% 10 Year 15 Year Since launch 7.4% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.8% 2021 3.9% 2020 7% 2019 8.5% 2018 7.6% 2017 7.2% 2016 9.2% 2015 8.9% 2014 9.7% 2013 9.5% Fund Manager information for Aditya Birla Sun Life Savings Fund
Name Since Tenure Sunaina Cunha 14 Jun 14 8.88 Yr. Kaustubh Gupta 15 Jul 11 11.8 Yr. Monika Gandhi 22 Mar 21 2.11 Yr. Dhaval Joshi 21 Nov 22 0.44 Yr. Data below for Aditya Birla Sun Life Savings Fund as on 30 Apr 23
Asset Allocation
Asset Class Value Cash 61.38% Debt 38.62% Debt Sector Allocation
Sector Value Corporate 43.74% Cash Equivalent 30.82% Government 25.2% Securitized 0.24% Credit Quality
Rating Value AA 21.44% AAA 78.56% Top Securities Holdings / Portfolio
Name Holding Value Quantity 182 DTB 29062023
Sovereign Bonds | -6% ₹855 Cr 86,204,130
↓ -5,000,000 Housing Development Finance Corporation Ltd
Debentures | -4% ₹597 Cr 6,000 182 DTB 29092023
Sovereign Bonds | -3% ₹487 Cr 50,000,000 Hindalco Industries Limited
Debentures | -2% ₹350 Cr 35,000 Bharti Telecom Limited
Debentures | -2% ₹325 Cr 3,250 Shriram Finance Limited
Debentures | -2% ₹275 Cr 2,750 Sikka Ports & Terminals Limited
Debentures | -2% ₹252 Cr 2,520 Reliance Industries Limited
Debentures | -2% ₹251 Cr 2,500 National Bank For Agriculture And Rural Development
Debentures | -2% ₹250 Cr 2,500 Cholamandalam Investment And Fin. Co. Ltd
Debentures | -2% ₹250 Cr 2,500 3. SBI Magnum Ultra Short Duration Fund
CAGR/Annualized return of 7.1% since its launch. Return for 2022 was 4.5% , 2021 was 3.4% and 2020 was 5.9% . SBI Magnum Ultra Short Duration Fund
Growth Launch Date 21 May 99 NAV (06 Jun 23) ₹5,164.52 ↑ 1.10 (0.02 %) Net Assets (Cr) ₹11,493 on 30 Apr 23 Category Debt - Ultrashort Bond AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Low Expense Ratio 0.49 Sharpe Ratio -0.87 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 500 Exit Load NIL Yield to Maturity 7.44% Effective Maturity 5 Months 26 Days Modified Duration 5 Months 12 Days Growth of 10,000 investment over the years.
Date Value 31 May 18 ₹10,000 31 May 19 ₹10,848 31 May 20 ₹11,658 31 May 21 ₹12,150 31 May 22 ₹12,545 31 May 23 ₹13,324 Returns for SBI Magnum Ultra Short Duration Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 Aug 22 Duration Returns 1 Month 0.7% 3 Month 2% 6 Month 3.5% 1 Year 6.3% 3 Year 4.6% 5 Year 5.9% 10 Year 15 Year Since launch 7.1% Historical performance (Yearly) on absolute basis
Year Returns 2022 4.5% 2021 3.4% 2020 5.9% 2019 8% 2018 7.9% 2017 6.6% 2016 7.7% 2015 8.3% 2014 9% 2013 9.3% Fund Manager information for SBI Magnum Ultra Short Duration Fund
Name Since Tenure Mohit Jain 30 Nov 17 5.42 Yr. Arun R. 1 Jul 21 1.83 Yr. Data below for SBI Magnum Ultra Short Duration Fund as on 30 Apr 23
Asset Allocation
Asset Class Value Cash 78.57% Debt 21.43% Debt Sector Allocation
Sector Value Cash Equivalent 59.11% Government 20.48% Corporate 20.41% Credit Quality
Rating Value AAA 100% Top Securities Holdings / Portfolio
Name Holding Value Quantity 91 DTB 03082023
Sovereign Bonds | -10% ₹1,202 Cr 122,000,000
↑ 122,000,000 182 DTB 22092023
Sovereign Bonds | -3% ₹439 Cr 45,000,000 91 DTB 01062023
Sovereign Bonds | -2% ₹282 Cr 28,331,000 182 DTB 31082023
Sovereign Bonds | -2% ₹245 Cr 25,000,000 182 DTB 14092023
Sovereign Bonds | -2% ₹196 Cr 20,000,000 09.63 AP Sdl 2024
Sovereign Bonds | -1% ₹184 Cr 18,100,000 Kotak Mahindra Prime Limited
Debentures | -1% ₹173 Cr 1,750 7.16% Govt Stock 2023
Sovereign Bonds | -1% ₹147 Cr 14,700,000 Bajaj Housing Finance Limited
Debentures | -1% ₹147 Cr 1,500
↑ 1,000 National Bank For Agriculture And Rural Development
Debentures | -1% ₹125 Cr 1,250
invest smart, Invest Better!
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
AMFI Registration No. 112358 | CIN: U74999MH2016PTC282153
Shepard Technologies Pvt. Ltd. (with ARN code 112358) makes no warranties or representations, express or implied, on products offered through the platform. It accepts no liability for any damages or losses, however caused, in connection with the use of, or on the reliance of its product or related services. Terms and conditions of the website are applicable.
©2023 Shepard Technologies Private Limited. All Rights Reserved